US says tariff increases on Chinese EVs, batteries and chips to start
Aug. 1
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[May 22, 2024] By
David Shepardson and David Lawder
(Reuters) -Some of the steep U.S. tariff increases on an array of
Chinese imports, including electric vehicles and their batteries,
computer chips and medical products, will take effect on Aug. 1, the
U.S. Trade Representative's office said on Wednesday.
President Joe Biden will keep tariffs put in place by his Republican
predecessor Donald Trump while ratcheting up others, including a
quadrupling of import duties on Chinese EVs to over 100% and a doubling
of semiconductor duties to 50%.
USTR said in a federal notice that a 30-day public comment period will
close June 28. The trade agency is seeking comments on the effects of
the proposed tariff increase on the U.S. economy, including consumers,
and on whether a proposed 25% duty on medical facemasks, gloves and
syringes should be higher.
The notice also provides specific tariff codes for some 387 product
categories affected along with new duty rates and implementation dates.
Tariffs targeted to start in 2025 and 2026 will start on Jan. 1 for
those years, USTR said.
The proposed Chinese tariff increases include "products targeted by
China for dominance, or are products in sectors where the United States
has recently made significant investments."
Washington is investing hundreds of billions of dollars in clean energy
tax subsidies to develop U.S. EV, solar and other new industries, and
has said China's state-driven excess production capacity in these
sectors threatens the viability of U.S. firms. The tariffs are meant to
protect U.S. jobs from a feared flood of cheap Chinese imports.
The new measures affect $18 billion in current imported Chinese goods
including steel and aluminum, semiconductors, electric vehicles,
critical minerals, solar cells and cranes, the White House said. The EV
figure may have more political than practical impact in the U.S., which
imports few Chinese EVs because of prior vehicle tariffs.
BATTERIES LOOM LARGE
The largest two categories, making up $13.2 billion of the targeted
imports from China in 2023, are lithium-ion batteries, according to U.S.
Census Bureau trade data.
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Duties of 25% are due to start in 2026 on the $10.9 billion
non-vehicle lithium-ion battery category, which has grown quickly
and is now the third-largest U.S. import category from China after
smartphones and personal computers.
The U.S. imported $427 billion in goods from China in 2023 and
exported $148 billion to the world's No. 2 economy, a trade gap that
has persisted for decades and become an ever more sensitive subject
in Washington.
U.S. Trade Representative Katherine Tai has said the revised tariffs
were justified because China was stealing U.S. intellectual
property. Tai has also recommended tariff exclusions for hundreds of
industrial machinery import categories from China, including solar
product manufacturing equipment.
China's trade ministry could not immediately be reached for comment,
nor could its embassy in Washington.
China has denounced the tariff hikes and vowed "resolute measures"
to protect its interests. On Sunday, Beijing announced a new
anti-dumping probe on certain industrial plastics from the U.S.,
Europe, Japan and Taiwan.
USTR said it would provide details on how companies could apply for
machinery exclusions from the tariffs in a separate notice. But it
said any exclusions granted would be backdated to start on Wednesday
and end on May 31, 2025.
U.S. Treasury Secretary Janet Yellen said on Tuesday she was pushing
for G7 allies at a finance ministers meeting in Italy to jointly
push back on China's industrial policies, although she said she was
not asking them to mirror the new U.S. tariffs.
The G7 industrial democracies are the U.S., Japan, Germany, France,
Britain, Italy and Canada.
(Reporting by David Shepardson; Editing by Lisa Shumaker, Louise
Heavens and Timothy Heritage)
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